The Michigan Strategic Fund voted Tuesday to forgive a $750,000 loan made to RecoveryPark and the for-profit subsidiary it created to grow produce in high tunnels and hydroponics greenhouses in Detroit.

RecoveryPark had gone into default on what was originally a $1 million loan, the state said, as it worked to cover costs of its pilot hydroponics and farming operations and round up financing to begin the larger-scale farming over a period of several years.

It had tapped only $750,000 of that loan, CEO Gary Wozniak said.

The loan was set to be forgiven when the farming operation had created 50 jobs, he said. Currently, it employs seven, but plans call for the hiring of 12-15 people coming out prison and/or drug recovery programs next summer in preparation for its first hydroponics "planting."

It will now be forgiven upon closing of the federal loans, Wozniak said.

Forgiveness of the loan was a condition of closing a 28-year loan backed by the U.S. Department of Agriculture and U.S. Small Business Administration and a 10-year loan backed by the U.S. Small Business Administration, both made through the Greater Nevada Credit Union's Greater Commercial Lending arm.

"It's a debt ratio issue, how much we are borrowing vs. how much we have to pay out," Wozniak said. "The project has taken so long to get the funding. The state has been working with us and (didn't) want it to go into default."

The deal approved by the Michigan Strategic Fund on Tuesday morning "is a way for the state to satisfy the requirements around the funding and a way to help us to get the greenhouse built," he said. "This gives us a clear path on all of our financing."

RecoveryPark began demolition to clear the site east of Eastern Market earlier this month, Wozniak said.

If the government-backed loans close in time, RecoveryPark plans to begin erecting the hydroponics greenhouse before year's end.

Editor's note: The original version of this story said the state voted to eliminate reporting requirements around a $400,000 grant to RecoveryPark. The state agreed to once-a-year reporting on that grant.